Brazil Lets Workers Pledge Their Severance Fund for Cheaper Loans
Brazil now lets formal workers pledge part of their FGTS severance fund as loan collateral, capping the rate near half the going price for payroll credit.
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Brazil Politics and Society Brazil Lets Workers Pledge Their Severance Fund for Cheaper Loans By Arkady Petrov · June 30, 2026 · 4 min read Daily Brief The morning intel from across Latin America. Free. Subscribe By subscribing you agree to our privacy policy. We never share your email. Economy Key Facts —The change. From June 26, formal workers can pledge part of their FGTS severance fund as collateral on a payroll loan. —How much. Up to 35% of severance pay, 100% of the dismissal penalty and 10% of the FGTS balance can be offered as a guarantee. —The payoff. Loans using the guarantee are capped at 1.99% a month, against a 3.79% average for this credit in April. —The catch. If the worker is dismissed, the bank can seize the pledged sums to clear the debt. —The scale.
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